The WTO and China’s Objectives as a World Trading Power

Hai Wen

China Center for Economic Research (CCER)

Peking University, Beijing

June 1997

The completion of the GATT Uruguay Round negotiation, the establishment of the World Trade Organization (WTO), together with the end of the Cold War and the economic transition in former planned economies signal that a new international economic order is emerging. This new international economic order is characterized by trade liberalization and multilateral economic cooperation.  In this order, the WTO is to be the “economic United Nations”, charged with implementing the GATT Uruguay Round agreements, settling trade disputes, and promoting a global free trade.

The validity and stability of the new international economic order largely depend on the effectiveness of the WTO.  To be a truly universal system, the WTO should incorporate all the leading economic powers, especially China and Russia, into the global system and bring them on the bandwagon of trade liberalization. Currently, China is still in the process of economic reform.  For this reason, some aspects of the Chinese economic system and trade policies have not yet met WTO standards.  At the same time, however, China has become an increasingly important country in the world economy. It is one of the largest and fastest-growing economies of the world in the past two decades.  China is too big to be changed and too important to be ignored.  “Keeping China outside the WTO, which no longer prevents it from playing a major role in real global trade, has become more costly for the multilateral trading system ”(MITI 1996).  Clearly, how to admit China as a member and to ensure it plays a constructive role in the new international order is a challenge for the WTO.

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